Many of the residential realty developers in India are either offering price discounts or other incentives
Investments in India’s real residential estate by non-resident Indians (NRIs), especially from the Gulf region, are on an upswing currently, riding on a slide in rupee value and attractive festival discounts offered on price by most of the developers across various Indian states, industry officials have said.
Many of the residential realty developers in India are either offering price discounts ranging from 3 – 6 percent or other incentives such as easy payment schedule or waiver of payments on some of the components of the overall price to investors, including NRI investors to perk up their sales during the on-going festival period.
Rupee exchange value sliding to 72 against the US dollar last week, from a high of 68-69 three months ago, has come as an additional incentive for NRIs as it will further lower the price for properties for them compared to resident buyers.
“We are seeing increased traction among NRIs off late to buy properties in India. There are various factors for this increasing demand, the important ones being heavy festive price discounts and other freebies offered by developers and fall in Rupee value against the US dollar,” Shajai Jacob, CEO-GCC, Anarock Property Consultants, told Arabian Business.
“Developers are pulling out all the stops to draw demand from both resident and non-resident Indians,” Jacob added.
The recent crash in India’s stock market and the lowering of interest rates on bank deposits have also added to NRIs’ decision to look at the realty sector as a safe long-term bet for investment purpose, Jacob said.
Industry analysts said game-changing policies like RERA (Real Estate Regulation and Development Act) and GST (goods and services tax) have also boosted confidence and transparency and streamlined the property-buying process for NRIs.
“This has fuelled new NRI investments into the Indian property market in the recent months,” a senior executive with a Mumbai-based housing finance company has said.
Reserve Bank of India and the federal ministry of finance have announced a slew of measures in the recent weeks such cut in repo rate and infusing about $9.8 billion for re-recapitalization of public sector banks as also providing additional capital to National Housing Bank, as part of the government's effors to boost consumption by making loans cheaper.
Industry sources said these measures have already started giving results by way of announcement of lowering of lending rates on loans, including housing loans, by some of the banks including the State Bank of India.
“These measures alone will result in housing sales increase between 5 and 7 percent in the last quarter FY ’19,” Anuj Puri, chairman of Anarock has said.
Top 7 Indian cities saw housing sales rise by 32 percent in H1 2019 as against the corresponding period a year ago, with housing sales increasing to 147,000 units in the first half of this year, as against 111,000 units during the same period year of 2018.